What Type of Interest or Fees can an Ontario Court Award in a Personal Injury Lawsuit?

Injured accident survivors often face long-term physical, emotional, and financial challenges. Recovering the compensation they are rightfully owed is not always a straightforward process. Indeed, many factors and considerations must be weighed throughout the process of awarding restitution before a final amount can be determined.

Case Study: Howland v. Estate of Howland

A recent decision by an Ontario Superior Court judge, Howland v. Estate of Howland, offers a helpful illustration of what these additional issues include. This terrible case began with an August 2010 accident near Ottawa. A mother and father were traveling with their 5-year-old son when their vehicle collided with another car. The accident killed both parents and left the son, who survived, with a traumatic brain injury. The child’s grandparents, acting on his behalf as well as their own, later filed a personal injury claim in Superior Court against the mother’s estate and the other driver involved in the crash. The child’s half-sister was also a plaintiff, as she claimed damages under Ontario’s Family Law Act for the death of her father. Although the plaintiffs filed their lawsuit in 2012, the case was not actually tried until January 2018. After a 34-day trial, the jury determined the deceased mother was 100% responsible for the accident. It awarded a variety of damages to the surviving son, including $350,000 for non-pecuniary losses (pain and suffering), $270,000 for future medical care, and $55,000 for future post-secondary studies. The half-sister received approximately $27,000 in damages. As both children previously received payments under Ontario’s Statutory Accident Benefits Schedule (SABS), their awards were reduced accordingly. This left the defendant estate liable for a total of $585,000 to the son and roughly $8,500 to the husband’s daughter.

Judge Declines to Rewrite Jury’s Verdict

This was not the end of the matter. The trial judge then had to address a number of post-trial motions offered by the plaintiffs and the defendant estate. The first issue regarded the jury’s $55,000 award for the son’s future post-secondary educational expenses. The estate maintained the jury made a “clerical error” and only meant to award $5,500 under this category. As the judge explained, this particular award is designed to compensate the son for “difference between the cost of living on-campus and living off-campus” when he attends university in the future. At trial, the jury received evidence indicating these additional costs would be approximately $5,100 for the son’s first two years of studies. The estate suggested the jury decided to compensate the son for the cost of his tuition as well, which was not appropriate under the circumstances. The judge, however, declined to “speculate about whether the jury intended to write $5,500 instead of $55,000 and, it intended to write $55,000, about the rationale for the number.” The judge noted the estate did not ask the court to recall the jury or appeal the award directly. While Ontario judges do have the authority correct obvious clerical mistakes in jury verdicts, the judge here said granting the defence’s request “would involve more than simply moving a comma and a decimal point one space to the left; it would involve reducing the jury’s verdict by $49,500.00 and would certainly challenge its validity.”

Pre-Judgment Interest

The next issue addressed by the court involved the question of interest. Many people do not realize this, but when a plaintiff wins damages in a personal injury case, the defendant is liable for both pre- and post-judgment interest on the award. Pre-judgment interest is particularly important, as it often takes many years to successfully litigate a case. Indeed, approximately eight years elapsed between the original accident and the jury trial in this case. The actual rate of interest is governed by Ontario law. The government revises the interest rate each quarter. For purposes of establishing pre-judgment interest, the applicable rate is for the quarter when the plaintiff serves his or her notice of action on the defendant. In this case, that occurred during the third quarter of 2012, when the pre-judgment interest rate was 1.3%.The parties disagreed as to when interest began to accrue. The plaintiffs maintained it was the date of the accident itself, which was in August 2010. The defendant estate replied that interest should be calculated from the date it received “written notice” of the plaintiff’s claim, which did not occur until two years later, in August 2012.The judge ultimately decided that interest started to accrue on November 5, 2010. She selected this date because that was when the defendant’s insurance company “knew that the plaintiffs had retained a lawyer” and were aware of the circumstances surrounding the August 2010 accident. In other words, the judge said what mattered is not when the defence received formal notice of the personal injury claim, but when they reasonably should have known such a claim was likely. The defendant estate was therefore liable for 2,686 days of pre-judgment interest, which came out to over $40,000 for the son and $812.72 for the daughter. The judge also awarded post-judgment interest of 3%, starting from the date of the jury’s March 2018 verdict and continuing until the damage award is paid in full.

Management Fees

One final issue of note in this case was the judge’s decision to award a “management fee” in connection with the son’s damage award. Because the son is still a minor, a guardian must exercise legal control over his property. This guardianship will continue until at least the time he turns 18, and perhaps longer if the son’s traumatic brain injury affects his ability to manage his own affairs going forward. The judge agreed with the plaintiffs that based on the evidence presented at trial, the son “will continue to require various types of support until his late 20s or early 30s.” Given the time and effort required of the guardian to manage the son’s sizable award, the judge found a management fee was appropriate. She therefore ordered the defendant estate to pay approximately $30,000–representing 5% of the damage award–as a management fee.

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“If you were involved in an accident, our Ontario personal injury lawyers may be able to help you navigate the complicated process of recovering the compensation you deserve. To learn more, schedule a free initial consultation by calling Preszler Injury Lawyers at 1-800-JUSTICE.